Zambia’s Growth Climbs to 5.2%: AfDB Urges Bigger Push for Development Finance

The report, titled Mobilising Zambia’s Development Financing at Scale in a Fragmented World, arrives at a time when many countries continue to face economic uncertainty linked to geopolitical tensions, conflicts and political instability.

Zambia's economy gained momentum in 2025, with growth rising to 5.2 percent from 3.8 percent in the previous year, according to the African Development Bank's 2026 Country Focus Report. Improved performance across agriculture, information and communications technology, transport, mining, manufacturing, foreign investment and exports helped drive the stronger expansion.

The report, titled Mobilising Zambia's Development Financing at Scale in a Fragmented World, arrives at a time when many countries continue to face economic uncertainty linked to geopolitical tensions, conflicts and political instability. The findings were presented in Lusaka by African Development Bank Country Economist Toussaint Houeninvo during a gathering that brought together policymakers, business leaders, development partners and academics.

Country faces a multi-billion-dollar financing gap for transformation goals through 2030

Although Zambia's economic outlook has improved, the report notes that securing enough financing remains one of the country's biggest challenges. Development ambitions are growing rapidly, and the resources required to achieve them far exceed current funding levels, making new financing approaches increasingly important.

The report points to progress in domestic resource mobilisation, with local sources covering about 81 percent of Zambia's 2025 national budget. Even with that achievement, financing needs linked to the country's structural transformation agenda remain substantial. Annual requirements are estimated at US$6.9 billion through 2030, leaving a financing gap of roughly US$5.4 billion. Average financial inflows between 2020 and 2024 stood at only US$379 million, illustrating the scale of the challenge.

According to the report, closing this gap will require stronger mobilisation of both domestic and international resources. Multilateral development banks are expected to play an important role through concessional funding and risk-sharing instruments that can encourage greater participation from private investors. The report also calls for tax reforms that expand the tax base, simplify procedures, improve compliance and strengthen digital systems used in revenue collection.

New AfDB report highlights stronger economic performance despite global uncertainty

Zambia has taken steps to rebuild its legal and regulatory framework for PPPs, particularly through the 2023 PPP Act. The revised framework supports small and medium-scale projects that can accelerate infrastructure development and help address local economic needs.

The report argues that funding solutions should extend beyond traditional government borrowing and public finance. Capital markets can contribute through instruments such as municipal bonds, green bonds, social bonds, sustainability-linked bonds and gender bonds. Pension funds and other institutional investors are also identified as potential sources of long-term capital that can support major development projects.

Investment priorities highlighted in the report include natural-resource value addition, agro-processing industries, climate-resilient infrastructure, economic diversification initiatives and job creation programmes. These sectors are viewed as important drivers of sustainable growth and economic resilience.

Private investment, capital markets and PPP reforms are seen as key funding sources

Speaking at the launch, Permanent Secretary for Economic Management and Finance at the Ministry of Finance and National Planning, Mulele Mulele, endorsed the report's findings and recommendations. He said the Zambian government remains committed to reforms that improve the business environment and encourage private sector-led growth, with particular attention to employment opportunities for women and young people.

African Development Bank Country Manager for Zambia, Raubil Durowoju, noted that the country report mirrors the broader themes featured in the Bank's 2026 African Economic Outlook. He also highlighted the importance of the New African Financial Architecture for Development (NAFAD), an initiative created to mobilise larger volumes of domestic savings and investment capital across the continent. The framework is intended to lower investment risks and attract greater private-sector participation in African economies.

More than 100 participants attended the report launch event, representing government institutions, private sector organisations, development partners, diplomatic missions, civil society groups and academia. Their presence reflected growing interest in how Zambia can unlock new sources of financing and maintain the economic momentum that has emerged over the past year.